The energy sector, particularly electricity, is a significant contributor to economic growth in Saint Lucia, a small island developing state in the Eastern Caribbean. An adequate, reliable, and cost effective power supply is essential for facilitating industries such as tourism and other services, and for stimulating economic growth.

The sole power company (Saint Lucia Electricity Services – LUCELEC) in Saint Lucia has managed to maintain a stable and reliable supply of electricity to keep up with current peak demand (60 MW), which has been growing at an average annual of 2.6 percent during the period from 2007-12. Whilst reliability of electricity supply has not been a major issue, the relatively high price of electricity continues to pose a challenge to development.

In 2010, the Government of Saint Lucia approved the National Energy Policy (NEP), which provided the appropriate policy and legislative environment, to utilize greater renewable energy to the extent possible, in order to lower the cost and price volatility of electricity and to reduce Saint Lucia’s dependence on imported oil. The NEP establishes renewable energy targets of 5 percent of the electricity generated via renewable sources by 2013, 15 percent by 2015, and 30 percent by 2020. It proposes to also allow small scale renewable energy development and distributed generation.

In 2012, the Government of Saint Lucia announced refined targets in line with the Barbados Declaration on Sustainable Energy for All (SE4ALL) which included a renewable energy target of 20 percent by 2020 and an energy efficiency target of 20 percent reduction in consumption in the public sector by 2020. In 2014, recognizing the strategic progress being made in attracting investment in geothermal and wind in particular, and the corresponding changes in the regulatory environment to facilitate the de-bundling of generation from transmission and distribution, the Prime Minister increased this target to 35%.

To further assist in providing the appropriate policy and legislative environment, a National Utility Regulation Commission Bill has been drafted by the government. The purpose of the Bill is to establish an independent regulatory Commission for the regulation of utility supply services sectors and to provide for related matters. The Bill is aimed at allowing liberalized and non-discriminatory entry into the utilities sector and enabling a robust competitive environment in which there is fairness, transparency and accountability, on the part of the regulators of the sectors.

The Government of Saint Lucia is also in the process of establishing a new Electricity Supply Services Bill. The new Electricity Supply Services Bill is necessary to facilitate reform of the energy sector. It makes provision for the introduction of independent power producers in the electricity sector, consistent with government`s plan for greater use of renewable forms of energy.

In 2014, The Government of Saint Lucia began a process of consolidating a national energy roadmap for the country, led by the Ministry of Sustainable Development, Energy, Science and Technology. This road map is expected to provide a clear outline and structure to the development of the renewable energy resource on island and energy efficiency programs. During this same year, the Government of Saint Lucia also launched its preparatory phase of its Geothermal Resource Development Programme, which is co-financed by World Bank through the Global Environment Facility (GEF) and Small Island Developing States (SIDS DOCK) Support Program, the government of New Zealand, and the Clinton Climate Initiative. This phase is expected to terminate in 2017 with the commencement of the exploratory drilling phase. It is projected that Saint Lucia could be producing 15MW of geothermal electricity by 2020-22, with a further 15MW by 2025-27.

Early in 2015, the Government of Saint Lucia joined hands with the utility company and a private developer to establish the first wind test tower on the island. This tower would provide necessary information to the developer to undertake the construction of a wind farm on island with project capacity of 12MW. The expected date for wind energy penetration into the national grid is late 2016.